Article: Fintech leaders speak out: What Budget 2025 must deliver

Economy & Policy

Fintech leaders speak out: What Budget 2025 must deliver

India’s fintech sector is primed for rapid growth, but it needs the right support to reach its full potential. Industry leaders call on the government to deliver a bold Budget 2025 that fuels innovation and expands financial inclusion.
Fintech leaders speak out: What Budget 2025 must deliver

India's fintech revolution has changed the way we pay, borrow, and invest, making life easier and boosting the economy. But as the sector grows, it's running into hurdles like rising costs and a funding crunch. Fintech leaders are urging the government to step up with targeted measures in Budget 2025, including a bold suggestion to create a ₹1,000 crore dedicated fintech fund.

This need for government support was highlighted in a recent Ministry of Finance meeting with over 60 fintech founders. The meeting stressed the need for innovation within a strong regulatory framework, highlighting key enablers like Aadhaar, UPI, AePS, and initiatives such as the Regulatory Sandbox and Fintech Repository. M. Nagaraju, Secretary, DFS, underscored the sector's rapid growth and stressed the need to strengthen digital payment infrastructure in rural and northeastern regions, particularly through digital footprint-based lending for MSMEs to enhance financial inclusion.

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Building on this momentum, industry leaders are urging the government to use Budget 2025 to tackle key challenges. They’re calling for clearer regulations, more investment in R&D, and skill-building initiatives to bridge the talent gap. With stronger public-private collaborations, better credit access for MSMEs, enhanced cybersecurity, and clear data privacy rules, India can unlock fintech’s full potential, believe fintech leaders.

What fintech leaders are saying...

‘A legacy-defining moment’

“This budget isn’t just about numbers,” says Ram Medury, Founder and CEO of Maxiom Wealth. “It’s a chance to shape India’s economic future on the global stage.” With global headwinds and a growing trade deficit, the pressure is on. Fintech, with its ability to spark innovation and drive growth, is key to navigating these challenges.

Medury envisions a budget that doesn’t just respond to today’s issues but lays the groundwork for tomorrow’s success. He points to initiatives like PM Surya Ghar Muft Bijli Yojana, which has seen 1.28 crore registrations, showing the power of bold, far-reaching programs. With India’s economy on a steady path, this is the moment for decisive action to not just lead in fintech, but to create a sustainable and inclusive future for all.

Moving beyond just bank accounts

“While schemes like PM Jan Dhan Yojana have expanded access to bank accounts, true financial inclusion requires more,” says Arun Poddar, Executive Director & CEO of Choice International. “Owning an account isn’t enough; people must be empowered to use financial services effectively.” This, he believes, means investing in stronger digital infrastructure and prioritizing financial literacy programs.

Rahul Jain, CFO of NTT DATA Payment Services India, agrees, stressing the need for the government to incentivize low-value BHIM UPI payments and RuPay debit card usage. He explains that service providers incur a 0.25% cost per transaction, urging investment in emerging technologies like AI, face recognition payments, and blockchain to boost the payment ecosystem’s security and efficiency. With government support, these technologies could enhance financial inclusion and foster fintech growth.

Poddar also highlights the critical role of small businesses and startups, particularly in Tier 2 to Tier 6 cities. By targeting support to these enterprises, the Union Budget 2025 could open up new economic opportunities, driving inclusive growth and creating jobs in underserved regions.

Fixing the digital lending landscape

Yashoraj Tyagi, CEO of CASHe, draws attention to the challenges plaguing the digital lending space – from rising credit fraud and limited consumer protection to increasing cyber threats. He believes the time is ripe for stronger regulations and better safeguards to protect consumers in this rapidly growing sector.

Tyagi's suggestion of an India Fintech Credit Fund stands out. This initiative could give smaller fintech players the financial backing they need, creating a more competitive and innovative landscape. He also calls for a sharper focus on financial inclusion, especially in underserved Tier II and Tier III cities. With the right policies, the Union Budget 2025 could open doors to financial services for millions, fostering growth and empowerment for individuals nationwide.

Bridging the urban-rural divide

Dilip Modi, Founder and CEO of Spice Money, highlights fintech’s pivotal role in narrowing the urban-rural divide. He points to the success of initiatives like Aadhaar Enabled Payment System (AePS) and Bharat Connect, which have become vital lifelines for rural populations.

Modi advocates for tech upgrades and increased financial support for grassroots operators. By integrating Transactional Business Correspondents (TBCs) into the Digital Banking Unit (DBU) framework, rural banking could see wider participation. He also proposes reducing or waiving GST on financial services at Banking Agent outlets, which would ease the financial strain on these operators, fostering greater financial inclusion in rural India.

Fueling innovation and growth

India’s digital payments landscape has matured, with over 12 billion UPI transactions processed monthly. However, S Anand, Founder and CEO of PaySprint, believes more support is needed to sustain this growth. He suggests policies promoting interoperability, open banking, and API-driven platforms, which could enable fintechs to scale and innovate more effectively.

Anand acknowledges the progress in financial inclusion but highlights the persistent barriers to digital adoption in rural areas. He advocates for investments in digital literacy, enhanced internet infrastructure, and subsidies to help small businesses adopt digital payment systems. "The Budget could incentivize efforts that bridge these gaps, helping India reach its $200 billion fintech potential by 2030,” Anand adds.

To foster fintech innovation, Anand calls for tax relief and funding programs to support startups and RegTech. Despite India having around 10,244 fintech entities—the third largest in the world—many face scaling challenges due to high compliance costs and limited capital access. Incentives for early-stage innovators could unlock transformative solutions in areas like fraud detection, automated compliance, and data security.

Lastly, as digital payments exceed ₹20 lakh crore monthly, trust in secure platforms becomes paramount. Rahul Jain, CFO of NTT DATA Payment Services India, emphasises the need for stringent measures to combat rising digital fraud. He supports the call for budget provisions that establish national cybersecurity frameworks and offer grants to fintechs for investing in advanced data protection technologies.

Will this be the budget that finally taps into fintech's full potential, connecting urban and rural India, supporting small businesses, and propelling the country to the top of the global fintech ranks? With the right investments and forward-thinking policies, India has the chance to lead the way, creating a more inclusive and secure financial future for all.

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Topics: Economy & Policy, Skilling, #Budget2025

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